Sky Quarry Receives Permission to Operate Fractionation Facility at Eagle Springs Refinery Site, Advancing Waste-to-Energy Vision

Rhea-AI Summary

Sky Quarry (NASDAQ: SKYQ) has received permission to operate a Fractionation Facility at the Eagle Springs Refinery in Nevada, marking a significant milestone in its strategic plan to expand the Foreland Refinery.

The operational permit from the U.S. Department of the Interior Bureau of Land Management covers a 40-acre right-of-way on public lands and extends through December 31, 2055. Part of Sky Quarry’s 2024 capital program, this facility aims to optimize production capacity in anticipation of higher output in 2025.

Once operational, the facility will enhance efficiency and ensure compliance with environmental standards. The company’s LTM revenue of $23 million reflects successful growth initiatives and comprehensive refurbishment of the Foreland Refinery. The new facility will help Sky Quarry capitalize on market opportunities created by the closure of the Phillips 66 refinery, which supplies 8% of California’s gasoline, in late 2025.

Strategically located, the Foreland Refinery will work with Sky Quarry’s PR Spring hydrocarbon extraction facility in Utah, projected to produce up to one million barrels of sustainable oil annually starting in 2025.

Positive

• Received a 30-year operational permit for a Fractionation Facility at Eagle Springs Refinery.
• Expected increase in production capacity for 2025.
• LTM revenue of $23 million.
• Strategic positioning to capitalize on Phillips 66 refinery closure.
• Projected production of up to one million barrels of sustainable oil annually starting in 2025.

Negative

• Closure of Phillips 66 refinery, responsible for 8% of California's gasoline supply, could impact regional fuel demand dynamics.

Insights

Energy Industry Analyst

This operational permit marks a strategic expansion in Sky Quarry's refining capabilities, particularly significant given the upcoming closure of Phillips 66's California refinery. The $23 million LTM revenue and 30-year permit through 2055 provide stable foundation for growth. The timing is optimal - as Phillips 66's facility closure will create a significant supply gap of 8% in California's gasoline market, positioning Sky Quarry to capture market share.

The fractionation facility enhancement, combined with PR Spring's projected 1 million barrel annual sustainable oil production, represents a calculated move to capitalize on California's stringent regulatory environment. Nevada's more favorable regulatory landscape gives Sky Quarry a competitive advantage in serving the California market. This geographical arbitrage opportunity could substantially boost profit margins.

Environmental Technology Specialist

The integration of waste asphalt shingle recycling with traditional refining operations demonstrates an innovative approach to sustainable energy production. The PR Spring hydrocarbon extraction facility's connection to the Foreland Refinery creates a unique waste-to-energy ecosystem. This vertical integration strategy not only addresses waste management challenges but also produces valuable energy products.

The 40-acre right-of-way permit through 2055 provides long-term operational security for implementing advanced fractionation technologies. The facility's focus on environmental compliance while maintaining operational efficiency showcases a balanced approach to sustainable energy production. The expected 2025 production increase aligns with growing market demand for sustainably sourced energy products.

Market Research Analyst

The regional market dynamics present a compelling opportunity. The Phillips 66 refinery closure creates a substantial supply vacuum in California's fuel market. Sky Quarry's Nevada location offers a strategic advantage - proximity to California markets without the burden of California's strict regulatory requirements. This positioning could lead to significant market share gains and improved profit margins.

The company's focus on sustainable oil production through waste recycling aligns with increasing ESG investment trends. With potential annual production of 1 million barrels of sustainable oil, Sky Quarry is well-positioned to serve both traditional energy markets and growing demand for sustainable alternatives. The $23 million LTM revenue provides a solid foundation for this expansion phase.

Achieves Operational Milestone in the Company’s Strategic Plan to Expand the Capabilities of its Foreland Refinery

WOODS CROSS, Utah, Jan. 08, 2025 (GLOBE NEWSWIRE) -- Sky Quarry Inc. (NASDAQ: SKYQ) ("Sky Quarry" or "the Company"), an integrated energy solutions company committed to revolutionizing the waste asphalt shingle recycling industry, today announced that it has received permission to operate and maintain a Fractionation Facility at the Eagle Springs Refinery in Nevada. This milestone is a key component of the Company’s strategic plan to expand the capabilities of its Foreland Refinery.

The operational permit from the U.S. Department of the Interior Bureau of Land Management is for a 40-acre right-of-way on public lands at the Eagle Springs Refinery in Railroad Valley, Nye County, Nevada. The term extends through December 31, 2055, a 30-year period from the effective date.

Securing this permit was part of Sky Quarry’s 2024 capital program, aimed at optimizing the Foreland Refinery’s production capacity in preparation for the significantly higher output expected in 2025. Once operational, the facility will be critical in improving operational efficiency and ensuring compliance with environmental and industry standards.

“We are excited about the progress we're making at the Foreland Refinery and are committed to increasing our production capacity in line with our sustainability goals,” said Marcus Laun, Founder and Director of Sky Quarry. “This fractionation facility and the associated upgrades will be key drivers in expanding our operations and supporting our waste-to-energy mission. We are dedicated to ensuring our facilities meet the highest environmental standards and are well-positioned for future growth.”

The Company’s last twelve months (LTM) revenue of $23 million reflects the successful execution of its growth initiatives and a comprehensive refurbishment of the Foreland refinery. This refurbishment, along with the Fractional Facility, will allow Sky Quarry to capitalize on emerging market opportunities created by the closure of the Phillips 66 refinery in late 2025.

The Phillips 66 refinery is responsible for 8% of California’s gasoline supply, and its closure is expected to shift regional fuel demand significantly. Management believes its strategically located Nevada refinery is well-positioned to step in and meet this demand, leveraging its location and capabilities without the stringent restrictions placed on California-based refineries.

The Foreland Refinery will operate with Sky Quarry’s PR Spring hydrocarbon extraction facility in neighboring Utah to refine sustainably produced oil. With PR Spring’s operations projected to commence in 2025, production is expected to reach up to one million barrels of sustainable oil annually.

About Sky Quarry Inc.

Sky Quarry Inc. (NASDAQ: SKYQ) and its subsidiaries are, collectively, an oil production, refining, and a development-stage environmental remediation company formed to deploy technologies to facilitate the recycling of waste asphalt shingles and remediation of oil-saturated sands and soils. Our waste-to-energy mission is to repurpose and upcycle millions of tons of asphalt shingle waste, diverting them from landfills. By doing so, we can contribute to improved waste management, promote resource efficiency, conserve natural resources, and reduce environmental impact. For more information, please visit skyquarry.com.

Forward-Looking Statements

This press release may include ''forward-looking statements.'' All statements pertaining to our future financial and/or operating results, future events, or future developments may constitute forward-looking statements. The statements may be identified by words such as “expect,” “look forward to,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” “will,” “project,” or words of similar meaning. Such statements are based on the current expectations and certain assumptions of our management, of which many are beyond our control. These are subject to a number of risks, uncertainties, and factors, including but not limited to those described in our disclosures. Should one or more of these risks or uncertainties materialize or should underlying expectations not occur or assumptions prove incorrect, actual results, performance, or our achievements may (negatively or positively) vary materially from those described explicitly or implicitly in the relevant forward-looking statement. We neither intend, nor assume any obligation, to update or revise these forward-looking statements in light of developments which differ from those anticipated. You are urged to carefully review and consider any cautionary statements and the Company’s other disclosures, including the statements made under the heading "Risk Factors" and elsewhere in the Company’s Form 1-A offering statement filed with the SEC. Forward-looking statements speak only as of the date of the document in which they are contained.

Investor Relations

Chris Tyson
Executive Vice President
MZ Group - MZ North America
949-491-8235
SKYQ@mzgroup.us
www.mzgroup.us

Corporate Contact

Jennifer Standley
Director of Investor Relations
Ir@skyquarry.com

Company Website
www.skyquarry.com

FAQ

What is the significance of Sky Quarry's new operational permit at Eagle Springs Refinery?

The permit allows Sky Quarry to operate a Fractionation Facility, enhancing production capacity and operational efficiency.

How long is the operational permit for Sky Quarry's Fractionation Facility valid?

The permit is valid for 30 years, extending through December 31, 2055.

What is Sky Quarry's expected production capacity increase for 2025?

Sky Quarry aims to significantly increase its production capacity in 2025.

How much revenue has Sky Quarry generated in the last twelve months?

Sky Quarry has generated $23 million in revenue over the last twelve months.

What impact will the closure of the Phillips 66 refinery have on Sky Quarry?

Sky Quarry is strategically positioned to meet regional fuel demand following the Phillips 66 refinery closure.

When is Sky Quarry's PR Spring hydrocarbon extraction facility expected to commence operations?

The PR Spring facility is projected to start operations in 2025.

How much sustainable oil is Sky Quarry expected to produce annually starting in 2025?

Sky Quarry is expected to produce up to one million barrels of sustainable oil annually starting in 2025.